 Experience vs. obsolescence: A vintage-human-capital modelJournal of Economic Theory, 2014, vol. 150, issue C, 709-739 Abstract: I introduce endogenous human-capital accumulation into an infinite-horizon version of Chari and Hopenhaynʼs (1991) [4] vintage-human-capital model. Returns to skill and tenure premia are highest in young vintages, where skill is scarcest and agents accumulate human capital fastest. As the vintage ages, the skill premium decreases and vanishes entirely upon vintage death. Workers run through cycles of human-capital accumulation: their wages rise as they accumulate skill, undergo downward pressure as the technology ages, and finally drop sharply when the worker switches to a new technology. The results are in line with German linked employer–employee data: tenure premia are highest in young establishments, as well as in fast-growing industries, occupations and establishments. A calibration exercise suggests that human-capital accumulation is the most important determinant of workersʼ wage profiles, whereas changes to the price of skill and vintage productivity gains play a smaller quantitative role. Keywords: Vintage human capital; Tenure-wage profiles (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:150:y:2014:i:c:p:709-739 DOI: 10.1016/j.jet.2013.08.003 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
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